Artificial Intelligence in Asset Management

100 Pages Posted: 14 Sep 2020

See all articles by Söhnke M. Bartram

Söhnke M. Bartram

Warwick Business School - Department of Finance; Centre for Economic Policy Research (CEPR)

Jürgen Branke

University of Warwick - Operational Research & Systems (ORS) Subject Group

Mehrshad Motahari

University of Cambridge - Judge Business School

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Date Written: September 14, 2020

Abstract

Artificial intelligence (AI) has grown in presence in asset management and has revolutionized the sector in many ways. It has improved portfolio management, trading, and risk management practices by increasing efficiency, accuracy, and compliance. In particular, AI techniques help construct portfolios based on more accurate risk and return forecasts and more complex constraints. Trading algorithms use AI to devise novel trading signals and execute trades with lower transaction costs. AI also improves risk modeling and forecasting by generating insights from new data sources. Finally, robo-advisors owe a large part of their success to AI techniques. Yet the use of AI can also create new risks and challenges, such as those resulting from model opacity, complexity, and reliance on data integrity.

Suggested Citation

Bartram, Söhnke M. and Branke, Jürgen and Motahari, Mehrshad, Artificial Intelligence in Asset Management (September 14, 2020). CFA Institute Research Foundation Literature Reviews, August 2020, ISBN 978-1-952927-02-7, Available at SSRN: https://ssrn.com/abstract=3692805 or http://dx.doi.org/10.2139/ssrn.3692805

Söhnke M. Bartram (Contact Author)

Warwick Business School - Department of Finance ( email )

Coventry, CV4 7AL
United Kingdom
+44 (24) 7657 4168 (Phone)
+1 425 952 1070 (Fax)

HOME PAGE: http://go.warwick.ac.uk/sbartram/

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Jürgen Branke

University of Warwick - Operational Research & Systems (ORS) Subject Group ( email )

United Kingdom

Mehrshad Motahari

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom

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